Monday, October 04, 2010

Clinton's Fault

Interesting study from the American Sociological Review about the sub-prime mortgage mess:

Predatory lending aimed at racially segregated minority neighborhoods led to mass foreclosures that fueled the U.S. housing crisis, according to a new study published in the American Sociological Review.

Since their perspective is unsurprisingly lefty it's refreshing to see an admission of one of the main problems--too many defaults from the target group Carter and later Clinton were trying to "help".

Of course the sociologists came out with a stock rationale for those defaults--predatory lending--but subtract the idiotic boilerplate and the remainder nicely defines the problem and part of the reason for the subsequent great recession. That's not to say the MBS and other instruments created by banks and financial institutions weren't also to blame but they were clearly in response to the government's vision of affordable housing fueled by powerful lobbies, not the other way around.

That's why a job at one of the GSEs, like Fannie Mae, became a plum or maybe even more during the halcyon days of Clinton.

At any rate, perhaps someone can make sure the President of the United States gets this report because he's still out blaming the worst economic crisis since the depression on the 'failed policies' of George W. Shrub. Sounds like Clinton was at least half responsible, if not more, yet returning to his policies is what Obama is suggesting we need to do to fix everything.